04 Aug 2021

ADNOC Sells First Blue Ammonia Cargo to Japan's Itochu Amid Clean Energy Push

04 Aug 2021  by   

Abu Dhabi National Oil Co. has sold its first blue ammonia cargo to Japan's Itochu to be used in fertilizer production as the UAE's biggest energy company bolsters its clean energy push and enhances its ties with one of its top customers.

Fertiglobe, a 58:42 partnership between Dutch chemicals company OCI and ADNOC, will produce blue ammonia at its Fertil plant in the Ruwais Industrial Complex in Abu Dhabi for delivery to ADNOC's customers in Japan, ADNOC said in an Aug. 3 statement.

"The shipments, which were sold at an attractive premium to grey ammonia, underscore the favorable economics for blue ammonia as an emerging source of low-carbon energy," ADNOC said. "They represent the first production milestone of a planned scale-up of blue ammonia production capabilities in Abu Dhabi, which is expected to include a low-cost debottlenecking program at Fertil."

A joint study agreed July 8 between state-owned Japan Oil, Gas and Metals National Corp. (Jogmec), Japan's INPEX and JERA as well as ADNOC will explore the possibility of producing 1 million mt/year of blue ammonia in Abu Dhabi and transporting it to Japan, a Jogmec source previously told S&P Global Platts.

Tokyo's supply chain

The agreement follows the Japanese Ministry of Economy, Trade and Industry's first fuel ammonia deal in cooperation with ADNOC in January as Tokyo intends to develop its supply chain of blue ammonia, possibly in the Middle East, by the late 2020s.

"Starting with this trial of blue ammonia for fertilizer applications, we aim to create a wide range of ammonia value chains for existing industrial applications as well as future energy use," Masaya Tanaka, Executive Officer of Itochu Corp, said in the statement. "By collaborating with ADNOC and Fertiglobe, we expect to initiate and enhance our industrial portfolio in the fertilizer sector while achieving our commitments towards decarbonization activities in other industries".

Fertiglobe will join ADNOC and sovereign wealth fund ADQ as partner in a 1 million mt/year blue ammonia project in TA'ZIZ in Ruwais, ADNOC said in June.

The design contract for this project has been awarded, with a final investment decision expected in 2022, and start-up targeted for 2025.

"The company continues to engage with customers and partners to unlock new opportunities for blue hydrogen and hydrogen carrier fuels," ADNOC said.

Capturing CO2

The Fertil plant has a production capacity of 1.2 million mt/year of ammonia and 2.1 million mt/year of urea.

"While the ammonia Fertil produces is typically considered as 'grey' ammonia, the plant will be fitted with CO2 liquefaction units, and CO2 will be transferred to -- and reinjected into -- underground reservoirs by the ADNOC Al Reyadah carbon capture and storage plant to facilitate the production of blue ammonia," ADNOC said.

The CO2 will be used by ADNOC Onshore and stored underground in the Rumaitha and Bab fields. Al Reyadah can capture as much as 800,000 mt/year of CO2 from the local steel industry and ADNOC plans to boost its carbon capture utilization and storage capacity to 5 million mt/year by 2030.

ADNOC has announced a number of hydrogen agreements since the end of 2020, when Abu Dhabi's former Supreme Petroleum Council mandated the national oil producer to become a leader in the production of hydrogen.

The UAE and ADNOC are eyeing hydrogen exports mainly to Asian countries and companies. ADNOC has also signed hydrogen agreements with Japan's Ministry of Economy, Trade and Industry and South Korea's GS Energy.

The UAE's energy ministry, ADNOC, sovereign wealth funds ADQ and Mubadala Investment Co. formed a hydrogen alliance earlier in 2021 to promote the production and use of the fuel in the UAE and ultimately to export markets.


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